When residents of Humboldt wake up on New Year's Day they'll be greeted with a hike in their utility bill.
At a special meeting on Nov. 12, Humboldt's city council agreed to a utility rate increase as part of the city's 2014 budget process. This will mean a four per cent increase to the monthly flat fee; a six-and-a-half per cent increase to the water consumption rate; and a $1 increase to the monthly Storm Water Levy as of Jan. 1, 2014.
Most users, whether residential or commercial, will see an overall rate hike of between five and seven per cent on their monthly bill. The increases are part of a five-year utility plan agreed to by the city earlier this year that will see an average increase of about eight per cent per year.
The city sends utility bills to residential customers once every two months and once a month to commercial users. About 70 per cent of the cost of an average bill is based on the user's consumption; the other 30 per cent is a flat fee that everyone pays. The goal is to set the city on a path to sustainable utility rates while planning for future infrastructure costs and expansion.
"We need to set ourselves on a proper financial path," said Steve Brown, the city's director of finance.
"This is simply our continued, phased budgeting approach so that we are able to have reasonable, but necessary, rate increases," mayor Malcolm Eaton said in a release. "We need to ensure we're balancing increases so that they reflect the actual cost of providing these services to our residents, along with planning for future water and sewer infrastructure renewal projects."
Such infrastructure renewal projects can be very expensive; according to Brown, replacing three blocks of water mains over the summer cost the city about $400,000.
"We have major infrastructure costs on the horizon," Brown said. "Our reservoir is almost at full capacity and it will cost close to $3 million to upgrade and expand it over the next few years."
In addition to the reservoir, upgrades to the city's lift stations, responsible for moving fluids along the system, are upcoming.
Higher costs are being imposed at all levels of the supply chain. For example, SaskWater imposes an annual increase on the cost of its water (four per cent this year), a cost that must be passed along to consumers.
"subsidizing this essential service is just not an option anymore," Eaton said of the water supply.
In 2014 the city will also be offering a utility e-billing service so that residents can view and pay their bill online.
The utility rate increase is the first of four budget areas to be approved by city council; tax, capital and operating amounts will be determined early in 2014, according to Brown.
Although some residents and businesses will surely be unhappy with a more expensive utility bill, the goal, according to Brown, is to avoid trying to make up a fiscal gap all at once.
"There is a community in Saskatchewan that is implementing a 42 per cent rate increase next year," Brown said. "We don't want to end up in that situation. If we can start planning now, it's only going to get better with time."
